Replies to post #5768 on Capital Growth Systems, Inc.(fka CGSYQ)

[Juschilln]

I am gambling on Pivotal (private company) looking to go public using the Capital Growth System (shell) to take advantage of potential net operating losses, etc. Possible?? IDK, or care, what the heck I only have a grand tied up here. LOL!

[kennypooh]

What the corporation known as "Capital Growth Systems, Inc" WILL have are the assets that Pivotal didn't want and/or need in order to run a telecommunication business, a business that will now be privately held and controlled by Pivotal. In BK speak, it means that "Capital Growth Systems, Inc" will have been transformed from a working telecommunication business into an "estate" with enough assets to be classified as a public shell.

plmcc....the creditors that filed claims were to receive the proceeds from the sale of all the assets and payment was divvied out to them by the Delaware BK court. Pivotal could not pick and choose what it wanted or didn't want....It bid on all the assets and the Delaware BK court oversaw the transfer.

The remaining estate has just two part time employees for wind down and no (tangible) assets left.... and it has no business left of any sort...it's BK. It did not reorganize with the idea of emerging from BK as a going business of any nature.

Items of 'future value', such as tax carry forwards etc. that could later 'become' an asset, may also be subject to ongoing claims by the creditors if/when used? There are many things we won't know until the final filings. If they decide to cancel the shares....it's all a mute point.

We await clarity on the cancellation issue.

If you wish to consult an accountant for your own investment clarity...that's your choice.

The May 16 SEC filing clearly laid it out for all to see IMO.

Item 2.01 Completion of Acquisition or Disposition of Assets.
As was previously announced, Capital Growth Systems, Inc. (“Company”) and the following subsidiaries (“Subsidiaries” and together with the Company, the “Companies”) filed for bankruptcy protection in 2010 in the United States Bankruptcy Court for the District of Delaware (the “Court”): Global Capacity Group, Inc., Global Capacity Holdco, LLC, Capital Growth Acquisition, Inc., 20/20 Technologies, Inc., 20/20 Technologies I, LLC, Centrepath, Inc., Global Capacity Direct, LLC, FNS 2007, Inc. and Nexvu Technologies, LLC. On January 26, 2011 the Court approved the sale of substantially all of the assets of the Companies to Pivotal Global Capacity, LLC and its subsidiary, GC Pivotal, LLC (collectively, the “Buyers”).

On April 28, 2011 the Federal Communications Commission entered an order providing that its approval for the sale of the assets to Buyers, to be effective as of May 15, 2011.

On May 16, 2011 the Buyers and Companies announced to the Court that the sale of substantially all of the assets of the Companies was consummated in accordance with the form of notice and asset purchase agreement attached as Exhibits 99.1 and 99.2 to this Form 8-K. Pursuant to the asset purchase agreement the Buyers acquired substantially all of the assets of the Companies except those assets that were excluded and assumed certain specified liabilities of the Companies. The aggregate consideration for the purchase of the assets was $28,359,360.82, comprised of a credit bid of $9,000,000 against the secured debt held by the Buyers, credit bid of $10,699,360.82 to pay the debtor in possession (“DIP”) facility secured by the Companies’ assets and $8,660,000 additional cash payments to mission critical vendors, executory cure payments, priority tax payments, wind down budget (including certain insurance) payments and funding of certain administrative claims, advanced on the DIP facility.

As of May 16, 2011 the Companies and Buyers had received approval from state telecommunications regulatory authorities in most of the states in which any of the Companies were engaged in the provision of telecommunications services for the transfer of assets to the Buyers and the licensing of the Buyers. However, such approval had not yet been obtained in all such states (the states without full approval being the “Excluded States”). In order to address the need for regulatory approval in the Excluded States for the asset transfer (for which title remains with the Companies pending such approval) and regulatory approval for the Buyers’ operation of the telecommunications assets, GC Pivotal, LLC entered into a Management Services Agreement (“MSA”) dated as of May 13, 2011 with Global Capacity Group, Inc. and Global Capacity Direct, LLC (“Company Managers”) whereby GC Pivotal, LLC agreed to provide certain non-telecommunications management services and the Company Managers provide the telecommunications services in the Excluded States. The MSA continues in effect until GC Pivotal, LLC obtains all necessary state public utility commission authorizations to provide telecommunications services in the Excluded States (with approved asset transfers to it), mutual agreement of the parties or by GC Pivotal, LLC’s decision to terminate provision of those services upon two weeks’ advance notice. Upon public utility commission approval with respect to the transfer of telecommunications assets for any of the Excluded States, the title to those assets will be transferred from the applicable Companies to Buyers.

The Companies are presently in its wind down mode, now that the substantial majority of their assets have been conveyed to the Buyers, and the remaining telecommunications-related assets will be conveyed to the Buyers as remaining state public utility commission approvals are obtained for their conveyance.